How to Restore Credit After Bankruptcy
How to Restore Credit After Bankruptcy
While bankruptcy can have a negative impact on your credit, it also increase your credit because once you filed a Chapter 7 bankruptcy, your debt-to-income ratio will significantly increase. This is due to the fact that you no longer have old debt and more money can be used to pay new debt.
You can start rebuilding your credit by finding out the duration and type of your employment. It will be much less difficult to get new credit if you worked at the same job for a long period of time. However, having your employment history is only the first step in credit rebuilding.
You must remember the reason for filing a bankruptcy. If it’s something justifiable, for instance, illness or divorce, then you can still get a new credit. On the other hand, if it’s because of compulsive spending, gambling, drugs or alcohol, then you must first deal with these problems, otherwise, you cannot be a candidate for obtaining new credit.
After that, you can apply for a secured credit card, where you can put in money with a lender as security and the amount of deposit will also be your credit limit. A debit card is different because it has no credit lending component or credit history rebuilding record.
Furthermore, pay your current debt on time, for example, installment loans you might not have paid completely. This is very important, especially with secured loans like auto or mortgage loans, because every on time monthly payment will be reflected in your credit history and reported to the credit reporting agencies. Consequently, it will help in increasing your credit score.
Later, you can also get a store card from gas firm or department store, but keep in mind to use revolving credit casually and frequently.
The combination of credit cards, installment loans and store cards used and paid on time is one of the best ways to rebuilding your credit after a bankruptcy. It can be achieved for a couple of years, together with a decent employment history.
Related posts on loans for people with bad credit:
- Filing Bankruptcy Can Cause Serious Damage to Your Career Filing Bankruptcy Can Cause Serious Damage to Your Career An employer cannot use as a reason not to hire somebody who has declared bankruptcy. It is illegal for an employer to do it. But for having a bad credit, it is…...
- Filing Bankruptcy is Not A Hindrance to Improve Your Credit Filing Bankruptcy is Not A Hindrance to Improve Your Credit How would your credit appear after you have filed for bankruptcy? You are fully aware that having bad credit means that it would make it difficult for you to get a…...
- Three Credit Card Options for Bankruptcy Three Credit Card Options for Bankruptcy Bankruptcy is a big problem for individuals, not only does it decrease your credit score down to “poor” it also disallows customers who file it to benefit from credit card perks such as availing low interests,…...
- Car Loans for Citizens Who Have Filed Bankruptcy Car Loans for Citizens Who Have Filed Bankruptcy Auto Credit Express is dedicated to answer queries of clients who have difficulties in their finances due to credit problems; they have been at it for twenty years now. One of the most asked…...
- Bankruptcy Scores: Another Measure of Credit-worthiness Bankruptcy Scores: Another Measure of Credit-worthiness According to experts, another way for lenders and credit-card issuers to estimate the ability of applicants to pay their debts is through their bankruptcy score. Your bankruptcy score determines your possibility, as a potential borrower,…...
Filed under: bad credit • Credit • credit cards • Credit Score
Like this post? Subscribe to my RSS feed and get loads more!